Managing Migrated Data

Migrated Tax Data in Oracle E-Business Tax

Oracle E-Business Tax provides a common model for setting up and using existing Release 11i tax data for tax determination and tax calculation. This includes tax data that was originally set up in Payables, Purchasing, Receivables, and Projects.

Tax determination and tax calculation based on the tax classification code.

The Release 11i migration solution lets you begin using E-Business Tax according to your existing tax setup with a minimum number of changes. This solution allows for a gradual adaptation of the E-Business Tax setup and tax determination processes according to your needs. Once you complete the transition to E-Business Tax processes, you can disable the Release 11i migrated solution with no loss of service.

Data Ownership

In Release 11i, each application owned and maintained its own tax codes and rates for use with its application-specific transactions. Because E-Business Tax provides a single source for all transactions for tax determination and tax calculation services, the ownership of the tax setup moves to the E-Business Tax shared ownership model. In this model all legal entities and operating units of the company can share the same tax setup, while individual operating units may need to own tax setup for specific requirements as defined by the tax authority.

Existing operating units with Release 11i tax setup migrate as party-specific configuration owners, with the operating unit owning the tax setup. If a Receivables or Projects tax setup contains location-based tax codes, then these tax codes migrate as part of the common configuration, with the global configuration owner owning the location-based tax setup.

If you designate an operating unit with migrated tax setup to use the subscription of the legal entity, you can still make use of the tax classification code model for tax determination and tax calculation. See: Tax Classification Codes in Oracle E-Business Tax.

Transaction Handling

In Release 11i, Payables held summary tax distributions and allocations without showing taxable amount details or tax line information. Procurement transactions did not carry explicit tax lines and distributions, and every transaction query was a recalculation.

In E-Business Tax, there are these improves to the management of transaction handling and display:

One single repository with detailed and fully-allocated tax lines.

Common single repository for tax distributions for Procure to Pay transactions.

Document level summary tax lines for Payables transactions.

Tax line and tax distribution IDs are stamped on Payables and Receivables tax lines for reconciliation with product transactions.

Tax line and tax distribution IDs from product transactions are carried to Subledger Accounting for account reconciliation.

Note: Tax lines existing on an 11i item line, that are migrated to R12 will be recalculated, however, no new tax lines can be added to the 11i migrated item lines.

Tax Code Migration

In Release 11i, the application-specific tax code performed many tax-related functions. These included the tax type, tax rate, offset taxes, recovery rules, taxable basis determination, tax calculation, and maintenance of related tax accounts. The Receivables tax group let you combine tax codes to calculate multiple taxes on single taxable items. In keeping with the E-Business Tax setup, the functions of Payables and Receivables tax codes migrate to E-Business Tax records according to the E-Business Tax Regime-to-Rate model.

Note: For the Latin Tax Engine, tax regime codes are created based on the Tax Rule Set (global_attribute13) in AR_SYSTEM_PARAMETERS and taxes are created based on Latin Tax Categories. If you are using the Latin Tax Engine to calculate taxes, do not create new tax regimes and taxes, but continue to use the Latin tax categories, tax codes, and tax groups.

This table describes the major features of tax code migration.

AP/AR Tax Codes

E-Business Tax Record

OU country + Tax Type

Tax Regime Code

Tax code name

Tax Code and Tax Rate Code (minus numeric identifiers)

All tax codes

Tax Status of value Standard

Tax rate details:

Percentage rate

Effective date range

Default recovery rate

Offset tax code

Tax Rate record

Location-based tax rates

TCA geographies (locations)

Tax jurisdictions

Tax rates

Tax account details:

Set of books

Tax code combination

Tax Rate tax account record:

Ledger

Recoverable/Non-recoverable code combination

Tax calculation details

Tax classification code

Tax group with tax compounding

Tax regime and tax

Taxable basis formula

Global Descriptive Flexfield Migration

In Release 11i, you used the global descriptive flexfield to hold tax-specific information for Payables and Receivables transactions.

Tax Classification Codes in Oracle E-Business Tax

The migration of Release 11i tax codes and related tax setup to E-Business Tax is designed such that after migration you can arrive at the same tax result for the same transactions. Release 11i tax codes migrate to E-Business Tax as tax classification codes. The tax classification code is a tax determining factor under the Transaction Input Factor determining factor class. You can use tax classification codes and the Direct Tax Rate Determination rule type to set up a tax determination model similar to Release 11i. The elements of the direct tax rate determination model are:

At transaction time, E-Business Tax uses the tax classification code that is defaulted to the transaction line to determine the tax status and tax rate for applicable taxes. You can also manually enter a tax classification code on the transaction line.

Tax Configuration Migration Path

The automated migration process converts Release 11i tax data to E-Business Tax tax configuration data. Once the automated migration process is complete, you can begin using your migrated tax data in E-Business Tax without any additional modifications or updates.

Over time, you can apply incremental updates and modifications to migrated tax data in order to gradually move from the Release 11i tax code model to the E-Business Tax regime-to-rate and tax rules model. This gradual change can include:

Set Tax Inclusiveness on invoices at the party/party site and account tax levels.

Use Configuration Owner Tax Options for a combination of configuration owner and application event class to define the order in which parties/registrations are checked for tax inclusiveness and to override tax inclusive handling on transactions.

Tax Recovery

Allow Recoverable Taxes setting defined at Financials System Options.

Recovery rates and recovery rules associated with tax codes.

Allow Tax Recovery setting appears at both tax regime and tax levels, for more granular control.

Use Configuration Owner Tax Options for a combination of configuration owner and application event class to define a rounding precedence hierarchy for deriving the rounding level and rounding rule to use on a transaction.

Tax Profile Options

Set tax-related profile options under Payable, Receivables, and Cash Management.

Set tax-related profile options under E-Business Tax.

Use the Tax and Configuration Owner Tax Options settings in conjunction with profile options for more granular control.